amounts of information-- that is very software centric. and the neat services where your memories and what you're doing in your educational core, that's going to be kept in the cloud for you. that kind of plays to might rosoft's strengths. >> rose: bill gates for the hour next.

captioning sponsored by rose communications from our studios in new york city, this is charlie rose. >> rose: bill gates is here. he is, as you know, the chairman cofounder of the microsoft. his focus has been on philanthropic organizations since july of 2008 when he transitioned out of his day-to-day role at the company to run the bill and melinda gates foundation, along with his wife. it is the world's largest charity, devoted to improving global health and american education. the foundation is close to its target of eradicating the polio viking a goal bill gates is planning to achieve by 2018. i am pleased to have him back on the program. we come to you from the cbs news studio in new york. welcome. >> great to be here. >> rose: tell me this, the divisions in your life, which

we've talked about before-- chairman of microsoft. along with melinda, running the bill and melinda gates foundation. there's a third thing. what's the third thing, the catch-all for the rest of the things you do? >> well, innovation is what i love to work on, and so i'm spending time on energy innovation because we need cheap energy. we need clean energy. i'm creating a new high school course because i think science and history can be brought together and made more interesting. often, the money that lets you do the innovation is what's missing, and i'm lucky enough to have capital to-- whether it's a new nuclear reactor or cheap solar, i can back some wild ideas so that i put time into that. and it lets me learn a lot of science, work with brilliant people. >> rose: i have in my hand the bill and melinda gates at annual letter from you from the foundation. who is this directed to? who are you-- who do you want to

read this? >> well, warren buff set sort of an ideal person i'd like to find it interesting because he's very busy doing his job, but he cares a lot about these issues. he knows i get to travel to africa. i get to see what's going on with budgets and science. what's honestly taking place is there is the aid working? where's corruption blocking that? and so on a yearly basis, he'd like to have me summarize where i'm optimistic, where we have setbacks, how should people think about the big causes-- education and the needs of the poorest. >> rose: what's interesting here, the theme of this is measurement. and you say that's crucial to have a goal and to be able to measure how well you're doing if you're going to reach the goal. >> right. it's been stunning to me in the last year that the places we've done well are where we're going and really be able to see what's

going on. and, for example, if you want to get 90% of the kids vaccinated, then you better know within a month for this area, is it working? and if it's working really well, what are they doing right? why is it working here and not here? and the tools that let us measure-- sensors, satellitees, surveying people are much better. but idea of really bringing that to help the poorest, i'm stunned that that kind of thinking, systems feedback thinking is so rare. soap i wanted to highlight that we have seen it work, and now we need to apply it a lot more than ever before. >> rose: you cite a book by a gay named william rosen called, "the most powerful idea in the world." and it was about steam engines. >> right. so the world basically stayed the same in terms of livelihoods until the industrial revolution. and so the steam engine came

along and it led to factories being able to make projects. wool clothes became inexpensive. cotton became available to everyone. and the question, what was the magic there? this books covered very well. and the point they make unless you can measure which engine is better than the others, all of these thousands of little small ideas don't get chosen. they don't add up. so without that feedback of what's better, what's going on, then progress doesn't happen. but once you have the measurement, then it's obvious you discard this because it's not as good and you pick this and then you make the next improvement. and that constant, well-directed feedback, once you have mum, it naturally emerges. q. and technology makesmeasurem. >> yes, business, technology, you know, becauseun you've got to pick whatever drives profit. if you don't pick tyou don't get

to hire as many people. companies disappear. in the private sector, the idea of measurement almost goes without saying. when you get to government, because they don't pick clear goals and they don't have training and measurement, it's far more rare than it should be. . >> rose: and i assume government in its aids programs are demanding more measurement because of the economic hard times and the stress on their budgets. >> that's right. if we're going to justify in very tight budget times taking this money that goes to the poor and making it a priority, people have to know that it's not an image of the past where some dictator corruptly takes advantage of it, but rather that kids are getting malaria bed mat, and people are being kept alive on aids drugs. so the credibility of aid, which honestly in the past, some of it was misspent, we need to work on that or else it will be cut.

>> rose: and you have made the point often that the problems in the world are too big for either n.g.o.s or foundations to do without significant government aid you can't conquer these problems. >> that's right. our foundation spends about $3 billion internationally with all the things we do. overall, it's $130 billion, and the u.s. is about capitol hill 30 billion. although having foundations like ours is a huge thing, the if the u.s. cuts back in 10%, at least in dollar terms, you've cut out more than we bring. >> rose: in education, teachers sometimes object to be simply judged by teacher scores. this idea of measurement in eagle county, colorado, gave them a better way to evaluate performance. >> that's right. you can say that teachers shouldn't be measured at all. >> rose: right. >> and the great ones are great and the average ones are average.

or you could say that they should be measured just by student test scores and i think neither of those is satisfactory at all. the test scores don't capture the whole picture. they actually don't tell you what that teacher needs to improve. so what we're trying bring to this is the idea of surveying the students in a very smart way, asking them if the teacher uses time well, and which students they work well with, and using observationes, training both principals and teachers to go and sit down and be able to look for how you engage the class. and if we can train those evaluators well, then the teaching practice moves from thage up to the top car tile. that would make the u.s. system, which is now one of the worst in the rich world, absolutely the guest. best. if we can fund it with 2% of the salary budget, it can be a phenomenal tool to make

'dication achieve the goals we have in mind. >> rose: jim grant is actually as important as henry ford, ford motor company, or tom watts orange the i.b.m. company. what did jim grant do? >> jim grant was the head of unicef, the united nations organization thinking about children. and organizations like that, you know, talk about all the right things. but what he saw was that the vaccines weren't getting out to all the kids. only 25% of the world's kids were getting vaccines. and he decided he would build a measurement system-- this is in 1980. he built one that measured facts and coverage, and he would go and embarrass the political leaders whose countries had low numbers, praisethe ones who did it well. it was cheap snuff so incredibly impactful that he got vaccination from 25% up to over 70%. he saved more lives between 19

eighty and 1990 when he did that than anyone in all of history ever has, and yet, you know, he's not -- >> rose: known by many people. >> yeah, very obscure. when i went to buy the book about him, it was completely out of print. so it's impress they have it was a measurement system along with his moral correctness that let him achieve that dramatic result. >> rose: but the interesting thing, too swhen they stopped paying attention, it slid back down. >> that's right. as soon as it wasn't there, and the political leader being told, "hey, we're falling behind these people. we need to get our vacinators to work harder or put more money into it, then it went down quite a bit. and a lot of new vaccines came along that didn't get out there to the poor children so the gap between a poor child and a rich child that gap actually grew after the jim grant campaign had closed it quite a bit. >> rose: so turning to the

united nations, speak of great goals, there they are for the millennium grants. and they've set forecast for 2015, things that they'd like to achieve. how well have they done? and how do you measure that success as you define new goals for the next time? >> well, it's actually pretty rare for the united nations to talk about measurements. they usually talk in terms of absolutes, like rights for all, no more poverty. here, what they did is phenomenal. they picked goals, eight of them. number 1 is about poverty, cutting poverty in half by 2015. it's already been achieved. they picked childhood death rates, the number of kids who die under five, which was 12 million back in 1990. it's on a path by 2015 to be under six million. so that's a 50% reduction, faster than any time ever. and so the goals for the first time got u.n. agencies and donors thinking, another does

our money really impact this measure? which country is doing it well? so ethopia is a star because although they started from a bad situation, they cut their childhood death rate in two-third, and that was by looking at people who had done it well, and now they've become the example for all of africa how by putting in cheap, primary health care you can achieve an amazing result like that. >> rose: so on balance you give them high marks for what they've of they've been able to achieve even though they didn't meet the goals that were set? >> that's right. we achieved maybe half the goals. the other half we set the parhigh enough that we're not there. these are unique in getting people to collaborate. it's kind of a good news story, you know, cut category childhood death in half that i don't think that's out there. people see a small disaster that might kill a few hundred, but we

went from 12 million a year, and we'll get to less than 6 million. that-- that's great. in the next 15 years i'd like to see us get below three million. >> rose: you understand this letter, "from time to time we should step back and celebrate the achievements that come with having the right goals, combined with political will, enerous aid and it has certainly deepened my commitment to this work--" your commitment is pretty deep as it was. what do you mean by that, "deepening your commitment?" >> there are a lot of cynics out there who talk about, "hey, there's corruption. why should we do this? it's far away." and sometimes you feel like, gosh, that's such a constant thing. are we really going to make it? is this really as important as i think it is. and only by seeing the progress does it re-energize you to say

yes. h1n1 like any time in history, this inequity is being closed, and, you know, that matters to the fathers and mothersful africa. and in the long run it marts to humanity's ability to achieve big things. if we can eradicate polio, i think that's uplifting to all of our endeavors. >> rose: and all this got started because you and melinda were look at a pie chart, and you saw something called-- what was it? >> rotovirus. it was killing 500,000 children a year. and i said to melinda, i never heard of rotovirus. she'd never heard of rotovirus. is it some super difficult thing to get rid of? in fact, rich kids who have almost no risk of dying of it-- they might get a little sick-- they had a vaccine that worked super well. and the reason you had a half million deaths a year was because it wasn't cheap enough and it wasn't delivered to all

the children of the world. and that sort of became the centerpiece of, okay, we've got to do the foundation work now instead of waiting. and then warren came along and doubled the resources we have. >> rose: but that pie chart changed your life. it became the centerpiece of how i was gog spend my post-mace career. >> rose: what are the metrics of success for you? >> well, i take this childhood death number and say that's a report card for all of humanity. >> rose: right. because if you look at it, annual childhood death at that time was what, 20 million? >> you have to go back quite a ways to get to 20 million. in 1990, it was 12 million a year. >> rose: 12, okay. today it's what, 6? >> 6.-- sorry, just-- 6.9 million so we'll get down below

six. >> rose: but that's what's driving you, reducing young kids dying? >> yeah, when there's science that we could do the invention and do the delivery to dramatically reduce that, it's terrible that we don't. and yet, just capitalistic systems alone wouldn't get us to do that because these people have no money. and so what plans we can do is it can shed light on that and make sure the r& d gets funded, that the deliver gets done. >> rose: one thing you decide me before is seeing-- what you have to do is show people what's going on around the world. it can't just be numbers. has that experience changed you? >> i think to really commit yourself to this, you have to understand mentally, millions of kids, but you have to get your heart involved by going out to a

malaria ward and see the parents of the children who are still dying, see it filled up with kids with cholera or rotovirus. and look at that and say, "okay, this is what we're trying to stop." then every once in a while i go out and see there are less kids in those wards right now so you have that sense of progress. it's the individual cases. you know, like, i held in my hands a three-year-old girl who was one of the last in india to get polio, and she was smiling and happy. but she didn't realize that because her legs are paralyzed how that's going to make her life so much worse than it would have been if we had stopped polio sooner. >> rose: when you created the foundation the provision in the bylaws says you'll spend all the money-- or the foundation will cease to exist 50 years after-- >> we changed that to 20 years. >> rose: 20 years after either you or melinda is no longer living. you both are dead. >> exactly. >> rose: and because you wanted to make sure what by

putting that in? >> we think we picked important causes for this era, and that all the resources that are independent foundation should be spent against those causes. we're sure that in the future there will be rich people. they'll be more up to date about how to do things, how to execute things well. they'll pick the right team and create visibility. but we're sure we can make big progress in our lifetime. >> rose: you said you didn't like the implication that the problems were persist, despite the best efforts that you could make. >> that's right. >> rose: you set the idea, "we can accomplish this." >> and i don't want to hold back at all. i want all the resources to go against it because i know it's important. and, you know, i don't think having the money way out there in the future will will be nearly as valuable as ending

these disease. >> rose: so why is the eradication of polio so important that you consider it your most important mission? >> well, the world's put a lot into this. it started in 1988, when over 350,000 kids were being paralyze expected very quickly they got it down. and they spent billions and billions. in the year 2000, we looked like we were close. we're already giving and yet it turned out getting last few countries was very hard. there were some big setbacks in nigeria, the rumor that the vaccine sterilized women was a setback. >> rose: did people in the government start the rumor? >> yes, somebody running for office in the north starte started that rumor. now, later that very individual changed his mind and actually was publicly vaccinated his own children. but once a rumor like that gets out, it's very hard to stop the

damage. in fact, to this day, which is almost a decade later, in parts of northern nigeria, there's 20% of the households that the parents won't give the vaccine unless we bring in the religious leader and he really reassures them that, no, this is safe. the reputational vac ens are very fragile, and, you know, that's one of the big barriers. >> rose: but in the end, vaccines are your most important weapon. >> they're a magic tool. polio will be eradicate bide the polio vaccine. some day we'll have a malaria vaccine. inventing and delivering vaccines, that's the biggest impact we've had so far. >> rose: i'm interested in the culture thing, too, because there are people who kill vacinators. >> recently in the middle of december in pakistan, those going out to do the vaccination

campaign were attending some were killed if you want north of pakistan, some down in karachi, and that is horrific. it's hard to understand why that's happening. no one's claimed credit. we've gone a month now without much violence. we only have 250 cases last year in these three countries, and so the reason that we're doubling down, erasing a big budget, making sure everybody is committed to this because it's hard. once you get to zero, you dent you don't have to buy more polio vaccines. all those resources get freed up to work on the next big challenge. >> rose: there are three countries left, afghanistan, nigeria, pakistan. >> exactly. >> rose: and what's the percentage of polio casesem year now? >> the-- we had last year the lowest east was under 250.

the majority were in nigeria, and the rest were in pakistan and afghanistan. so it's minuscule and away are really, really close on this one. >> rose: is 2018 the number? is that the date? >> we're committing we will get it done by then. you have to get to zero cases and wait two years for there not to be any cases. >> rose: but is the idea here, too, that you can win in the global health battle? here is an example of what we can do? >> absolutely. what we're going to do to get rid of polio, that-- the systems we're going to build to reach kids with other disease, that would cuttify it, but the victory of achieving good things will make it worthwhile. >> rose: if you get polio what

disease are you saying you better watch out. we're coming after you next. >> i think as we're close or at the polar eradication, then we'll step back and look at malaria, and we'll have new tools. and i think we'll put a agreement plan and go after that. polio would be the second. so malayeria, hopefully, would be the third disease completely eradicated. > eradicated. is there an appreciation of the need. >> the financial cases was a setback for so many things. anything far away in distance or time, you know, when you've got problems here and now. they get less attention. so whether it's the health of people in africa, or the challenge of climate change, and what that's going to mean in 40 or 50 years, the financial crisis reduced attention to

these things. so global health, i think there is a consensus there. european governments have always been very generous on these things. and their -- >> rose: why are they more generous than we are? >> well, wit the u.s. aid budget is not nearly as big as a partiage of our economy. it's about .2% compared to germany and france are double that, and the really generous gives are above .7. they're over three times, that people like swooden and norway. you could say your defense budget and aid budget, add those together, that's your international engagement. because we have by far the world's biggest defense budget and we have the biggest international engagement budget. the europeans choose to balance their international engagement into vaccines and aids drugs and

things like that. so they're less about-- they're more about getting people lifted up so they can be self-sufficient. >> rose: you get a lecture last week, yesterday-- >> yes, yes. >> endowed by some journalists at the bbc, and what's interesting about it to me is you sailed three things. three convictions. the first was-- your work had given you three convictions. one-- i want you to elaborate on this-- when had gone improves life improves because disease and bad help insinuates itself into every aspect of your life. >> that's right. . in our country, kids have such a healthy life, that they go to school pretty fully equipped. their brain develops and they can achieve their potential. in africa, almost half the kids

are so damaged by malnutrition and other health things that they're never going to do well in school. so they're never going for themselves or their country and give in a productive way. if we can get the health improved, then it changes. and we've seen this. in societies where you get the health right, then all of a sudden you start to sigh the productivity goes up. also, the thing that's so magic to me and i can't say it enough times of times is that paradoxically, instead of having more population growth yawz of because you're keeping more arb live, which would seem to be what you would be causing. parents choose voluntarily to have less children because they have a sense they don't need to have as many to have a few survive to adulthood and take care of them. so then the benefit you see is that when population growth is

less, everything-- feeding kids, educating kids, having enough jobs, having stability, take care of the environment-- that really becomes a crucial thing and a society can get on a path to be like the u.s. . >> rose: give me an example of what excites you about what we're looking from mapping of the human genome and all the progress made since 2001 when it was announce bide people who had been working on it so hard? >> understanding the genome allows us to begin to understand how life works, including how disease works. so taking, for example, cancer, and saying, okay, that looks like breast cancer but it's-- there's many different types there. so the drugs used to treat it should be custom ides according to that pattern. you're starting to see the payoff on that. if you take plant-- because we can look at their d.n.a.-- we are beginning to understand

plant diseases and saying okay how can we allow african farmers not have all these insects and diseases that lower their call the ral productivity to be about a fifth of what we have here in the united states. so the genetic revolution is going to give to us in many, many, many forms. when we finally get an aids vaccine, partly that will be because the basic science has given us the insight as to hue the immune system works. >> rose: really interesting stuff in cancer dying nottics, too. there is-- diagnostic, too. you have become interested in agriculture. >> i'm a city boy and i didn't understand about -- >> rose: you didn't plant anything. >> where all that food comes from. but want 75% of the poor people in the world are people who live on very small farms. and thinking about okay, how do we lift them up?

forces you to say well, what was the green revolution in the 70s where wheat, rice, and corn productivity went up unbelievably. you know, why didn't that happen in africa? how do we carry that forward? how do we make sure it's being done in a sustainable way and meet the food needs of the entire planet which are growing quite rapidly. >> rose: on climate change, how are we doing? >> on climate change, you'd have to give us an fglu mine the world? >> yes. we are flunking this one right at the moment. we should be first and foremost spending more on research because we need press conference throughs for very cheap national guard don't emit co2s. and those research budgets stunningly haven't gone up while we've spent a lot of money on deployment of noneconomic stuff

that's valuable. we don't have a carbon tax. and the -- >> rose: is its carbon tax the way to go. not cap and trade, but carbon tax jathe difference between those are not that critical. >> rose: the idea is put a value on how much carbon you use. there are reasons are to do that. but because of the political realities, either one can be achieved. they both have the same effect, causing you to shift in making your energy in a way. >> you look at germany, and angela mirkle has basically sworn off nuclear energy. >> that is aa setback -- >> rose: you disagree with the decision she made. >> well, with the current generation of reacts, because of the fukushima accident -- >> rose: they're old. >> people are now worried about that. there haven't been that many accidents, so you can have a reasonable disagreement about the current generation.

there are generations coming that are inherently in their design form is more safe. if you don't like today's reactors you shouldn't group all the ways of generating nuclear energy that will come out. you shouldn't abandon those as well because we can make it so you don't need humans to make the right decision which today's reactors have that problem. >> rose: and what's the reaction in japan? >> well, japan has most of its reactors shut down. but the-- they'll probably start back up the reactors. but whether they get involved in building new reactors, i'd say it's a real question mark. china is the most aggressive right now in building nuclear actors. they have over 25 -- >> rose: they're doing everything. they go full steam ahead on everything-- coal, nuclear, alternative sources, solar,

wind. >> exactly. they need more increase in energy conservative, and write now-- right now the bulk of that are new coal plant because that is clear and the least expensive. invention is anything to have to make the tradeoff look very different. >> rose: when you look at alternative sources here in the united states, people are talking about gas and that it can make us energy independent. others raise questions about fracking, as you know. >> fracking, the issues of not contaminating water, there's no doubt done properly it's a very small extra cost. the local environmental issues can be taken care of. they're even looking at how the they recycle the water so they're not demanding water that might be used for other purposes. now, when you burn that natural gas, it still emits co2.

but it's a miracle for the u.s. and it's great-- great-- >> so we should go full speed ahead on the development of natural gas because it will make us energy independent or if possible fuel independent or wel from around the world and the political considerations of that make it urgent to do. >> right, and if we put a-- some price signal on carbon, this might be when you burn natural gas you may have to sequester the carbon and get it out of the atmosphere. natural gas will compete with other things, but over time, even there, you want to requira the extra carbon recovery. >> rose: here's something you would know the answer to. are we make anything progress in terms of battery development? and what's the problem that makes that so hard? >> well, the batteries we have today, you know, edson came

around. he would recognize them because they're these chemical peels. the breakthrough withlicateium gave us a factor of three improvement. so the batters are not good enough to take intermittent energy sources, like wind or sun, and be able to store that energy so it can be available whenever you want it. it puts a limit on your energy system. a lot of it has to be like cool or nuclear where it's 24 hours a day, whether the winds are blowing or whether the sun is shining. so if we had a battery miracle, there are two benefits to a battery miracle. one is that we could do electric cars enough range people would find them attractive. and so you move from gasoline to electricity for transport. the other is our electricity power generation, we could rely more on intermittent sources.

so there are a lot of battery start-ups that have -- >> rose: are you investing in batter start-ups? >> i'm in a lot of batter start-ups and they're cool. there are chemistries for small batteries and big batteries that look like they're big change. that will be part of the mix. some of them won't succeed, but there is more battery innovation now than at any time in the last 100 years. and some quite promising. >> rose: are you satisfied we're doing enough on emission standards in america? >> yeah, the u.s.-- the mileage standards are-- you know, we had a pause, now those are going up. there's a lot of question about what should e.p.a. do? should it get involved in the co2 issue? does it have the authority to do that or not? and tilt towards other sources of energy. or making the coal or natural gas take the co2 and sequester it. >> rose: i talked to al gore

last night who, as you know, is very strong, about some of the things you believe in. and yet at the same time, he talks with a certain cynicism about what's happening in-- you know where i'm going. he's got a new book, too, called "the future--" about washington and about dysfunction and about the power of money. >> well, al gore knows a lot more about poo politics than i do. and it's certainly disturbing that he's so concerned about it. now, -- >> rose: he's not the only one. >> no, i am, too. >> rose: exactly. >> when the insiders are worried, that's particularly scary. now over time, it's been a self-correcting system. you know -- >> rose: you mean democracy. >> u.s. democracy has taken where it was going to do the wrong thing for the country, somehow the voting process, the broader warn broad awareness

got our country to come back. our track record as a country relative to other countrie countries is phenomenal. so will those self-correcting mechanisms come along and allow us to make compromises so that we don't have a broken budget, so that we are functional? a government department only knowing what their budget is for two or three months, that's really so inefficient. i mean businesses would go bankrupt if they were run like this. seats just doesn't meet management 101 to run a large organization not knowing is the budget going this way or this way. >> rose: and no other organization is any larger than the u.s. government. >> many people are dependent on these policies, whether it's culture policies, aid policies. so we need better way of reaching compromises. now, -- >> rose: what's that way that you think might lead us there? >> i admit there's some mystery

to how a centrist group will come in and say it's not about-- it's not simply about "i hate government/i love government." it's about the parts that work effectively. can we curb medical costs? the dialogue hasn't started. just saying more government or less government, the government pays, note individual pays, that doesn't start to get at the transcribe prb -- >> rose: that's an economic issue, controlling health care for our economic future, is it not? >> that's right. and we should get the smartest people looking at how we use innovation, better systems design, better competition, how we use that to take that cost curve and get it more in line with economic growth. >> rose: you have a lot of free time. why don't you go to washington and say give me a chance. i'll put together a governor romney and we'll fix this? >> i think at some point the country is going to need to do that -- >> rose: do what. bring together a lot of i.q. on the problem. >> on health care costes,

absolutely. right now, there's a lot of incentives to invent expensive cures that don't have much impact. and there's actually disincentive to do some of the things that would make the system less expensive. and that's not going to be an overnight thing. but at some point, the politicians will realize they need to pull together expertise. none of these budget things really get at that core issue. >> rose: you know that your friend and mine, warren buffet, has strong opinions about taxation. do you share his opinions about what the tax on the wealthy of us ought to be and that we ought to pay more and it's a fair thing to do? >> yeah, there's two things-- two basic things i think warren would say. one is that the-- because your gains on capital are taxed at much lower rates, people like he and i pay lower rates than most working people. even very well-paid people like

lawyers pay much higher rates than people like hedge fund peoples, or investors. and there's a question whether on a broad basis or through some sort of minimum tax like the buffet rule, if you could bring those closer together. then second there's the question, if the government is going to be picking up health care costs for anig of aging society with increased health costs where is the money for that going to come from? you can't cut enough other government things? so you either have the government continue to offer that and, therefore, you have to raise taxes. or the government needs to back away from that promise. and, you know, i think raising taxes to some degree in the long run will be part of how we achieve it. >> rose: but as long as you make some reforms so that the structural issues are reduced. >> yeah, the rate it's going up,

effective tax rate you would need, no one would like. as long as something's growing faster than the economy is eats everything. so we've got to change that. even once we fix it, there will still be, in terms of balancing budgets and keeping those medical promises, you'll need more revenue or you'll need to find other places to cut back. >> rose: no one trastles around the world more than you do. maybe bill clinton. >> yeah, the clintons. >> rose: the clintons, exactly. does the world still look on the united states as the place that they'd like to see offer real global leadership? >> absolutely. it's-- it's almost daunting because they really do expect to us get our act together, and whether it's global security, global invention, doing governance right, they look to the united states. >> rose: and what do they expect from us? >> they expect to us get our -- >> rose: by example as well as

need. >> absolute. they expect, whether it's towfd disease, whether it's how you take care of your people as they get older. how you do education. how you keep driving innovation, how you deal with climate change, they actually expect the united states to take the lead. you know, as much as china is growing, nobody looks to them as a primary role model. . >> rose: because they see the things they do that are not very attractive or because there are so many possibilities of social tension within a country that large? >> ironically it's partly because china is so inward looking. there are people worry, are they get to get-- they've chosen to be answer inward work glg you mean about culture and everything else. >> they don't tell other countries how to do things. and they don't have a global

presence. so the vacuum created by the u.s. not having clear views and solving problems is very scary. you know, who is going to fill that void? yeah, there's a lot of great countries around. but we should be proud of the fact that people still expect us to step back, really know want numbers, know the science and come up with solutions. q. as you know better thananybog numbers in education and a whole range of issues where we seem to have lost our leadership. >> that is absolutely fair. and the fact we don't have a good teacher personnel system. i'd love to see us fix that. i will say in terms of using technology in education, the pioneers who are coming up with the new requested ideafor that are overwhelmingly based in the united states. >> rose: speak about online education are you more

enthusiastic about it now than you've ever been? >> quite a bit. >> rose: because you consume it. yeah but i'm unusual. i've always had an interest in taking courses that is atypical. but as you go online and you can personalize it, you can get the best leath furze world and can look at the person's state of knowledge, and you can explain things in a way that might engage them better. q. the interesting thing thathas seem to have more respect for it now. >> fear, respect-- you have this dilemma that we need more people to be college educated. the unemployment rate for college educated is not bad. it's less than 4%. and the jobs of the future are more on that. but if the cost of education is going up and the amount of money for education is going down, we have a dilemma. only technology looks as though it can take that cost which has been going like this, and for most students, bring it down.

so it's very timely that these online entrepreneurs that our foundation is the biggest backer of, that they're coming up with internet-drifep ways of making education cheaper to deliver. now we have to proved it out. we're at the army stage. what about a kid who is lost or not motivated. it can't just be for the elite. that's where we're already doing so well. it needs to be prove of proven but i feel very strongly we can tune it to work for all students, not only in the u.s. but worldwide. . >> rose: look at technology, and let me talk about microsoft first. you're the chairman of the company. >> i am steve balmen is the c.e.o. are you happy whiz performance. >> he and i are the two most self-critical people as you can imagine. there are a lot of amazing things that steve's leadership

got done in the company. windows 8 is key to the future. the surface computer. bing people seeing as a better search product. is it enough? no, he and i are not satisfied that in terms of, you know, breakthrough things that we're doing everything possible. >> rose: every time you see an article about microsoft, it's not so much about the success of bing or one thing or the other, it is about what happened at microsoft. or five things you ought to do to microsoft. when you see all this stuff, what do you think? >> we appreciate the advice. laugi mean, there are a lot of things, like cell phones, where we didn't get out and lead very early. >> rose: why not? did you just miss that? >> it's too complicated. >> rose: did you miss the cell phones? >> we didn't miss cell phones, but the way that we went about it didn't allow us to get the

leadership. it's clearly a mistake. we're attack the whole concept that you don't want a tab the, a p.c. you want something that has the best of both and we are in a strong leadership position with that essentially new category. so, you know, it's a very mixed bag, and that's what makes it an amazing business. it's very, very competitive. >> rose: would it have been different if you hadn't gotten interested in solving the world's problems. >> that's one of those counter-factuals that you'll never know. >> rose: all right, "counter-factuals." >> i think we would have done worse on global disease if i'd stayed full time. >> rose: but you left at about the same time. i want to stay with microsoft, though. what does it need to do? most people talk about google, apple, facebook, amazon. >> samsung. >> rose: samsung is coming on strong. they're the star of place

where's you used to make big speeches. >> none of them understand software that deals complex information, like microsoft does. in fact, really only of those, google is the only one that is it are movie a software company. and so the good news for mace is that the magic of the future-- visual recognition, speech recognition, letting you navigate rich amounts of information-- that is very software centric. and the needs services, your memories, that will be kept in the cloud for you. that kind of plays to microsoft's strepgz. now, we need to show people that's the case by building these wonderful new cloud services. if you want to look at what your kids did or what you did in the past, now it's so hard. you've got photos here leathers there, bills over here. it's completely disorganized. in the future, with the right privacy controls which is a tricky part of it, your whole life of where you went, going

back and sharing things with others you think they would be interested in. it's going to be utterly different. we're in a phase of great change where software and interface count a lot. you have at least six companies seizing this future -- >> rose: i hear you saying microsoft will be fine because software is key. >> i believe that. >> rose: is that the essence of what you're saying? >> i think microsoft can surprise people, and sometimes it's good when people are underestimating you. and i think-- oh, yeah, come on. x-box has been a huge success. don't go too overboard on me. it has done some wonderful things. when you have a product like bing that's a better product and you're trying to get awareness out there. that forces microsoft to be a better marketing company, and traditionally that has not been a huge strength.

we have creative people saying,"hey, don't just use the google search engine." >> rose: you know the answers to these kinds of things or at least you think about them, are apps going to replace search engines? >> well, the search engine today doesn't really understand your question. it just gives you a burn of rinkses. so the ability to understand, "oh, he's trying to pick a movie. here's what he's already seen. here's what he tend to like. here is who is going with him. here are the area they'll be in. you have to do all the work, you have to type the movies in and look at those theaters and reviews, and it's the kind of work you shouldn't have to do. if you want to buy a gift for somebody in a creative way and look at differentis cho, it's still hard to do. the search engines you won't type as much. you'll use voice more and they will be more task oriented than they are today. fortunately, what counts is not

staying still. now, neither of those competitors so the thung that will improve life the most in terms of how we look at data, learn, and things like that, is the digital revolution. it's still the center of activity. it's not like the industry microsoft is in is some boring, unimportant industry. "oh, i should have switched and bought a network." >> rose: it's the engine of the future. >> it's every bit as much as it has been. and that's why things like education, financial servicees for the poor, monitoring health, these things are all going to be built. innovations in other areas are really built on the fundamental tools that that amazing group of i.t. companies are providing. >> rose: there's a lot of analysis of sleep today. do you sleep much? >> yes, i'm-- i wish i was like these people who can sleep only four hours. figet less than seven hours, my i.q. starts to drop. and i find that very

disconcerting. so yeah i wish could get that seven hours back. >> rose: but you have to sleep seven or otherwise you're less efficient? >> i'm less intelligent. i can get by for a while. >> rose: can't you nap? >> i'm pretty good with napping, pretty good with jet lag. i'm a night purpose so i get very excited about something that's going wrong or right and i find it hard to go to bed. so i get squeezed. if i have a morning appointment and you stay up until 2:00 in the morning, you start it fall behind. >> reporter: paul alan was in i think new mexico and you at harvard and you concluded this train was leaving the station and you better get on it so you left harvard and created software and you went on to do what has enalled you to expand your horizons and icponentially. you wrote at that time a kind of

mission statement which was a computer-- whatever it was. >> computer on every desk and in every home. >> rose: what's the mission statement for bill gates today? >> well, if you want a broad one, it's that-- which is the found auction's driving value. it's that all lives have equal value. so you say why do poor children die when other children don't? why do some people have enough nutrition or reasonable toilets and other people don't? so those basic needs that through innovation, actually it's very affordable-- will be, to bring them to everyone. >> rose: thank you for coming. it's a pleasure to see you. >> thank you. >> rose: bill gates for the hour. thank you for joining us. see you next time. captioning sponsored by rose communications captioned by

media access group at wgbh access.wgbh.org

>> the following kqed production was produced in high definition. ♪ ♪ must have soup >> the pancake is to die for! >> it was a gut-bomb, but i liked it. >> i actually fantasize in private moments abouttthe food i had.

>> i didn't like it. >> you didn't like it? >> dining here makes me feel rich.